Today Acron (RTS, MICEX and LSE: AKRN) released its audited consolidated IFRS results for 2010.
Key Financials
• Revenue was up 24% year-on-year to RUB 46,738 million (USD 1,538 million), against RUB 37,542 million in 2009.
• EBITDA* totalled RUB 10,336 million (USD 340 million), up 42% year-on-year (2009: RUB 7,275 million).
• EBITDA margin was 22%, against 19% in 2009.
• Net profit was RUB 6,279 million (USD 207 million), down 13% year-on-year (2009: RUB 7,256 million).
• Net debt was RUB 28,315 million (USD 929 million), up 15% against RUB 24,726 million at the end of 2009.
Operating Results
• Total sales were 5,556,000 tonnes, up 4% year-on-year.
• Ammonia and mineral fertiliser sales increased 4% year-on-year to 4,624,000 tonnes.
• Sales of organic and non-organic compounds rose 3% year-on-year to 932,000 tonnes.
Alexander Popov, Chair of Acron’s Board of Directors, comments on the Group’s performance:
“This reporting period provides further proof that the fundamentals of the mineral fertiliser sector remain stable: global agriculture is in pressing need of fertilisers. Stable high demand for nitrogen and complex fertilisers in 2010 drove output and sales at the Group’s companies. Our main production facilities operated at full capacity throughout 2010, and an aggressive distribution policy furthered expansion into new, rapidly growing markets in Asian and Latin America.
“Higher key financials and operating results were achieved by an approach emphasising secure operation of all facilities, increased efficiency and profit margins in all production business segments, including Hongri Acron, and intensive development of logistics and distribution. The Group’s aggressive investments in mining production and the Oleniy Ruchey mine will result in independent phosphate supplies in 2012, which will improve the Group’s business sustainability and competitiveness.
“In the beginning of 2011 conditions have remained favourable in the global mineral fertiliser market, and we anticipate further growth in operating and financial highlights. We will also continue implementing key investment projects to increase the shareholder value of the Group.”
Financial Performance Analysis
The Group’s 2010 revenues increased 24% due to higher global fertiliser prices and improved sales, primarily of NPK complex fertilisers.
In the reporting year, EBITDA was up 42% year-on-year, and EBITDA margin increased to 22% (2009: 19%). EBITDA was up at all of the Group’s business segments, including Hongri Acron, which posted an EBITDA margin of 12%, against a loss incurred in 2009.
In 2010, net profit was down 13% year-on-year. This figure was affected by the Group’s sale in 2009 of its stake in Sibneftegaz, which brought in RUB 3,058.6 million in revenue. No comparable sale took place in the reporting year.
Net debt was up 15% to RUB 28,314.5 million (USD 929 million) due to the Group’s intensive investment programme. In the reporting year, Acron invested RUB 2,927.2 million (USD 96 million) in the Oleniy Ruchey mine and RUB 1,815.6 million (USD 60 million) in improvements to its production sites. The Group’s relative debt burden was down despite these significant investments: the net debt-to-EBITDA ratio was 2.7, against 3.4 at the end of 2009.
Complete financial statements and a presentation on 2010 financial results are available at www.acron.ru. A detailed analysis of the Group’s 2010 performance is presented in its 2010 annual report, a draft version of which will become available at www.acron.ru on April 28, 2011.
Note: The exchange rate used for currency conversions was RUB 30.4769 to USD 1 as of December 31, 2010 and RUB 30.2442 for USD 1.00 as of December 31, 2009. The average exchange rate was RUB 30.3765 to USD 1 in 2010 and RUB 31.7669 to USD 1 in 2009.
*EBITDA is calculated as operating profit adjusted to reflect depreciation of fixed and intangible assets, Forex gains or losses, and other non-monetary and non-core items.